SFH Portfolio deal - how's it look to you?

[Christopher Brown]

I'd love another set of eyes on this deal. The portfolio is in a tertiary market, mostly C/D properties and all Section 8. 100% occupancy and multiyear leases in place on all the units. I've always been an A/B buy and hold investor, but I've got an opportunity here with management in place and about a 10% cap to cash flow really well. I'd expect OPEX to be a bigger % of gross rents - closer to 50% than the ~30% I'm seeing here. Are OPEX generally lower as a % of rents with this class of properties? Trash is included in the real estate taxes. The actuals/pro forma that I have don't break out any CAPEX, and many of the homes are 50+ yrs old, so I'll have to see some hard numbers on what that cost has been. Any other cost categories (either here on the table or that aren't included) that raise any eyebrows?

Thanks for any feedback...

Financial Summary
ACTUAL	ACTUAL	ACTUAL	PROFORMA
2013	Per Unit	2014	Per Unit	2015	Per Unit	Per Unit	Notes
# of Properties Owned	37	38	43	43
Rental Income	$250,291	$6,765	$268,647	$7,070	$309,854	$7,206	$333,540	$7,757
Effective Gross Rents	$250,291	$6,765	$268,647	$7,070	$309,854	$7,206	$333,540	$7,757
Utilities	$12,142	$328	$2,372	$62	$0	$0	$1,075	$25	Tenants pay for utilities. Assume $25 per unit for turnover.
Repairs & Maintenance	$14,800	$400	$15,200	$400	$17,200	$400	$17,200	$400	$400 per unit, which is historical average for non-capital items
Pest Control	$4,159	$112	$4,072	$107	$6,235	$145	$6,422	$149	Based off 3% escalation from 2015
Management Fee	$20,023	$541	$21,492	$566	$24,788	$576	$26,683	$621	8.00% fee
General & Administrative	$103	$3	$84	$2	$80	$2	$2,000	$47
Real Estate Taxes	$14,788	$400	$14,906	$392	$15,371	$357	$15,832	$368	Based off 3% escalation from 2015
Insurance	$13,420	$363	$17,253	$454	$19,008	$442	$19,578	$455	Based off 3% escalation from 2015
Accounting & Professional Fees	$7,141	$193	$6,548	$172	$7,364	$171	$7,585	$176	Based off 3% escalation from 2015
Misc.	$403	$11	$165	$4	$0	$0	$0	$0
Total Operating Expenses	$86,979	$2,351	$82,091	$2,160	$90,047	$2,094	$96,376	$2,241
Net Operating Income	$163,312	$4,414	$186,556	$4,909	$219,807	$5,112	$237,164	$5,515